Counterfeit Steel Market Putting Safety at Risk

Abu Dhabi

SAAC meets to discuss industry concerns with UAE Department of Economic Development and Criminal Investigation Department

12 November 2016
Abu Dhabi, UAE: Leading members of the global Steel Alliance Against Counterfeiting (SAAC) – an industry initiative of 18 global steel products manufacturers committed to combating counterfeiting, have said that the growing presence of counterfeit steel products in the Middle East poses considerable safety, legal and financial risks for all stakeholders, with potentially disastrous consequences for the environment and lives in case of accidents.

According to the Alliance, which includes some of world’s largest steel and steel products manufacturers, every one of their businesses has been – and continues to be – directly exposed and affected in the region by sub-standard and uncertified products fraudulently marked with their respective brand. Collectively, the Alliance represents steel products producers with operations worth approximately USD$20 billion in turnover. The Alliance representatives were speaking on the sidelines of the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC).

“While there are no quantifiable statistics on the size of the counterfeit market in the region, its presence is real and represents a threat to the safety and integrity of this region’s current investments in major infrastructure projects,” said Andrey Burtsev, Vice-President of sales, Interpipe. “Not only are our businesses being defrauded but end-users are too and that exposes them,” he continued.
Dr. Carlo Farina, Managing Director, Friedrich Geldbach, Gmbh, added, “This dark industry is estimated to be worth several millions, and it is putting reputable domestic and international manufacturers at risk because the counterfeiters are able to outcompete the market on price. While we understand costs are important, product quality and safety must never be compromised.”

Concerns have been raised regarding the emergence of more intermediaries that claim to have European products, license registrations and/or manufacturing facilities, but whose products have become difficult to trace or even ‘untraceable’. This lack of product certainty must be addressed, according to the Alliance members, who are urging regional authorities to introduce added layers of accountability and scrutiny of the true origin of the products offered for sale by traders during the approval stage rather than just relying on the brand appearing on the products.
Earlier this week, the Alliance pledged its support for ongoing revisions to the UAE Fire and Life Safety Code of Practice 2016. Further, the Alliance met in Dubai with the Criminal Investigations Department (CID) and the Department of Economic Development (DED) to discuss the need for their full collaboration in the fight against counterfeiters through effective investigations and seizures of counterfeit steel tubular products.

Anaïs Eiden, Group Senior Legal Manager, Intellectual Property and Innovation, Vallourec, said, “We are committed to working with all relevant stakeholders and government bodies in the UAE and across the region, to take meaningful steps to mitigate the risks resulting from counterfeiting and avoid this unlawful practice from becoming an even more systemic problem. We intend to intensify our awareness campaign and tools in the coming months whilst working collaboratively with authorities and end-users to identify solutions.”

The Alliance works to address and curb two forms of illicit practices, namely:

The fraudulent branding of non-certified steel products with the brand of well-known, certified suppliers often sold together with falsified certificates
The refurbishment of used steel products to appear and be sold as new
In that context, the Alliance advocates for the adoption of more stringent rules regarding the control of the origin of steel products in general, and in the revised UAE fire safety code in particular. The Alliance supports increased mandatory authenticity checks of the mill test certificates (MTC), to mitigate the use of counterfeit products. These controls are critical to guarantee the origin and quality of the steel products and ensure compliance with safety standards required within the oil & gas and construction sectors.

The Alliance, which was first launched during ADIPEC last year, participated in this year’s event from November 7-9, 2016.